"Producer's Corner"
by Bruce Lazarus

Negotiating Theatre Licenses – Part II

Recently, our guest was Albert Poland, General Manager of  Wait Until Dark starring Marisa Tomei and Quentin Tarantino and last year’s Tony Award-winning Best Play The Last Night of Ballyhoo on Broadway, and Marc Salem’s Mindgames off-Broadway.  Albert’s additional general managing credits include Little Shop of Horrors, Steel Magnolias, Only Kidding, Steve Martin’s Picasso at the Lapin Agile and Sam Shepard’s A Lie of the Mind.  In addition to discussing negotiating a theatre license, which I discussed in a previous “Producer’s Corner,” Albert talked about how a general manager’s diligence in keeping an eye on a production’s financial situation can keep the production running.

As discussed in Part I of this series, a production usually pays the theatre a flat weekly rent, a “package fee” that covers the salaries of box office and house staff as well as administrative costs, and a percentage of the Gross Weekly Box Office Receipts (“GWBOR”) above the show’s weekly “break even” point (the show’s fixed weekly operating costs).  One of the first things a general manager does on a production is negotiate and draft this agreement, along with the producers and their legal counsel.  The general manager’s quest to keep production costs down can begin here.  If the general manager is negotiating a license with a theatre owner who is highly motivated to get a quality production into his or her theatre, the general manager may negotiate a relatively low rent in exchange for giving the theatre a higher percentage each week after the “break even.”  As an example, Albert recalled when he licensed Shubert theatres on Broadway for As Is and the Steppenwolf Theatre Company’s production of  The Grapes of Wrath.  “The Shuberts” (Gerald Schoenfeld and  the late Bernard Jacobs) knew that these were prestige productions of quality plays that nevertheless might need time to find an audience.  Therefore, as they had a close relationship, Albert was able to negotiate very low rents in exchange for a higher percentage of any box office gross above the weekly “break even.”  In general, however, Albert warned, Broadway is more financially oriented than off-Broadway, and all of the contracts more complex due to the more complex union regulations.

It is also important to get your production off to a good start by choosing the right time to open.  Most Broadway shows prefer the spring so they can use the June Tony Award as a springboard.  In general, Albert said, fall is a better time to open a drama, and spring a better time to open comedies and musicals.  This is primarily because the tourists that come to New York in the late spring and summer tend to buy tickets to shows that promise lighter entertainment.  As far as critical reception is concerned, critics are in a more casual mode in the early summer, after the spring shows have opened, and are more likely to be sympathetic in their reviews of new works.  They are also more sympathetic to a show that catches their attention in a small or institutional venue, because they enjoy the satisfaction that comes with “discovering” a new work or quality revival.  As a general rule, Albert pointed out, it is not wise to open a production between Thanksgiving and the middle of January, when theatergoer’s’ minds are on the holidays.  Also avoid opening between the end of June and Labor Day, because the press is dispersed and many important critics are away.

Finally, we discussed the recent trend of opening shows in non-traditional venues, such as Hedwig and the Angry Inch at the new Jane Street Theatre, which is a converted ballroom.  Albert said he would always be open to new and off-the-beaten-track venues if they were right for the production, but would not approach the idea “with optimism.”  Any space used to present a show would need to be brought up to safety and fire codes, which can be very expensive (in the case of Hedwig, the renovation cost $100,000).  In addition, it is always difficult to convince audiences to go to an out-of-the-way neighborhood to see a production.  The Roundabout is presenting its new production of  Cabaret at the “Kit Kat Club,” which at one time was the Henry Miller Theatre but has not been used as a theatre for quite some time.  However, it is on West 43rd Street, only a half block from most of the major Broadway theatres.

In general, the cost of producing a show and keeping it running is rising quickly.  In his own research, Albert recently discovered that while the cost of living has gone up 50% over the past 17 years (the number of years he has been producing and general managing), the cost of advertising in The New York Times has gone up 637%.  The moral of the story is to find a diligent, knowledgeable general manager for your production who will be your general in your battle of the budget.  That battle begins with the author and director and then the negotiation of a theatre license that allows your production to minimize its expenses, while at the same time allowing everyone who took a risk at the beginning to reap the rewards if the show is a success.

Bruce Lazarus the former Director of Business and Legal Affairs for Walt Disney Theatrical Productions and producer of the current off-Broadway show Shakespeare's "R&J."

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